Aviva, the world's fifth largest insurance group, is the market leader for life and pension products and general insurance in the UK, and is the leading provider of life and pensions to Europe. Its main activities are long-term savings, fund management and general insurance.
In the UK, Aviva's main operations are Norwich Union, RAC and the asset management business Morley. Internationally the company has a presence across Europe, North America and Asia Pacific. Globally it has 59,000 employees serving more than 40 million customers.
Aviva’s vision for CSR is acting responsibly for the long term in how it does business to help meet its ambition of being the world’s most trusted savings, investment and insurance provider.
Aviva has a CSR policy which is global and applies throughout the Aviva Group. The policy governs its approach to all its activities. It is based on the underlying company philosophy that a responsible approach to developing relationships between companies and the communities they serve – global or local – is vital to delivering business success.
Aviva started reporting on its environmental performance in 1999 and is committed to continuous improvement. Aviva reports under seven elements of CSR: standards of business conduct; customers; people; diversity; suppliers; community and the environment.
This case study focuses on Aviva’s environmental programme, particularly its work to reduce its carbon emissions and offset all residual emissions, making the company the first insurer to carbon neutralise its worldwide operations.
The drivers for carbon neutrality
Aviva is only too aware of the strategic implications of climate change for the financial services sector and therefore managing its impact on the environment is central to their CSR programme. The decision to become the first insurer to carbon neutralise its worldwide operations in December 2006 was driven by a number of factors relating to the Group’s desire to:
Be responsible and minimise its contribution to causing climate change and encourage others to do the same;
Maintain its forward thinking reputation and create a market differentiator;
Create competitive advantage to strengthen opportunities to access new markets (e.g. socially responsible investment) or new products with environmental focus (e.g. discounts on hybrid cars);
Increase employee engagement and trust by motivating staff to take action to reduce energy use and improve energy efficiency in the office and, in turn, at home; and
Identify business risks associated with climate change by taking a proactive approach.
Prior to the company’s announcement of carbon neutrality in December 2006, it had already made good progress in reducing its carbon dioxide output, cutting its building and travel related CO2 by 54% (2002-2005).
Aviva manages its environmental footprint as follows:
Energy-efficient property management – Aviva takes advantage of new build and refurbishment projects to realise environmental savings. For example, Aviva’s Irish business, Hibernian, has a new environmentally efficient HQ building with low energy lighting, recyclable furniture and carpets, and plenty of natural light.
Energy consumption – 55% of the electricity Aviva uses globally comes from zero emissions sources and all businesses are encouraged to reduce energy consumption, e.g. ‘switch off’ campaigns or by providing shuttle buses for employees’ commute to work from public transport.
Improving waste management – Across the Group Aviva recycles 59% of their waste.
Paper usage – Aviva is constantly looking for ways to use less paper (e.g. via double-sided printing and electronic archiving) and to use paper with recycled content. Print stations have replaced 400 printers and copiers in Hibernian’s HQ with just 46, saving paper and power.
Cutting down travel – Aviva tries to cut down on business travel wherever it can. Initiatives include a CEO-sponsored ‘telepresence’ project in the UK which involves staff using teleconferencing rather than travelling to meetings. Aviva also has in-house car-pooling schemes.
In 2007, the focus on carbon management was strengthened and has been made a corporate objective.
Carbon offsetting – the offsetting process began with an audit of the Group operations’ carbon emissions throughout 25 countries. An independent third party has verified the final figure and the company approached two carbon brokers to buy the equivalent carbon credits – amounts of carbon that can be created and purchased. The criteria for selecting projects to source carbon credits was developed internally (see Additional Notes).
One challenge was the wide ranging understanding of climate change in the different countries in which it operates.
Another challenge in reducing emissions and offsetting the remaining emissions is the business growth and recent acquisitions, for example of the RAC in the UK, mean that its worldwide carbon footprint has nearly doubled.
In 2007, Aviva will offset its remaining emissions on a retrospective basis starting with emissions generated in 2006 – some 125,000 tonnes in total. The offsetting will compensate for its carbon output caused by the consumption of non-renewable sourced electricity, gas and oil from buildings and business travel, including air, car and train, across all its global operations.
To offset 2006 carbon emissions, six projects have been selected. The projects have a global focus and are a blend of social and commercial projects. These projects include a biogas project in Sri Lanka that is generating energy from cow manure through biogas technology as a free sustainable source of power. This process replaces wood fuel and saves 3,000 tonnes of CO2 equivalent (see Additional Notes for other examples).
Core to Aviva’s business is making provisions for future events. The climate change strategy is about making provisions for the future effects of climate change through adapting and creating new products and services to meet this challenge; this is the main business benefit to the Group.
Why is it CSR?
CSR for Aviva is about how you do business and it strongly believes that acting responsibly – and this includes taking account of its direct and environmental impacts – for the long term will help it meet its ambition of being the world’s most trusted savings, investment and insurance provider.
The Group will work with others to continue to better understand the future implications of climate change and play its part in helping to develop and deliver society’s continuing response. This will, for example, include a set of guidelines around offsetting as a further tool to encourage staff and customers to consider the issue of climate change and the way they can play their part.
Aviva’s criteria for types of projects to source carbon credits from:
These criteria have been developed internally and include:
Additionality – projects selected would achieve reductions that are additional to those that otherwise would occur;
Retiring – the carbon credits that are generated or purchased are immediately retired from any market situation so that they cannot be sold again, thereby avoiding double selling;
Projects are to be independently verified by a third party and should qualify for the highest of the standards currently available;
Carbon credits should be achieved within 10 years of the year in which the offsets apply;
Projects, where possible, should have a social aspect to them (this added value factor was highlighted by the Board); and
Single investment projects in countries in which the Group operates are preferred as they can be identified as Aviva’s.
Other examples of projects being used to offset 2006 carbon emissions:
In sub-Saharan Africa, Aviva is supporting the World Food Organisation’s project of replacing open fires with energy efficient stoves helping to stop deforestation and save 20,000 tonnes of CO2.
In the Netherlands and Ireland, Aviva is helping to make ‘green’ cement from the bi-production of iron production. This method reduces 0.8 tonnes of CO2 emissions for every tonne of cement produced, compared to conventional methods. 30,000 tonnes of CO2 equivalent credits will be sourced.
Other offset projects include treadle pumps for irrigation in rural India and two wind turbine projects in India and China.
For more information on Aviva, please contact Group CSR Director Louella Eastman on firstname.lastname@example.org or visit www.aviva.com/csr.
© Article 13 and CBI – CSR Case Study Series, September 2007
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